Corporate communication and shareholder base retention: evidence from spin-offs

Ryan P. McDonough ()
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Ryan P. McDonough: Rutgers, The State University of New Jersey

Review of Quantitative Finance and Accounting, 2023, vol. 60, issue 4, No 1, 1283-1327

Abstract: Abstract I ask whether corporate communication programs influence shareholder base retention. I use spin-offs to study the communication programs of the spun-off business units that inherit their parent firms’ shareholders. Unit firms that initiate a communication program maintain higher levels of post-spin-off institutional ownership and retain more of the inherited institutional shareholder base than firms that do not communicate. An important benefit of communication is that these firms avoid the stock price pressure commonly experienced by unit firms following a sell-off by the inherited institutional shareholder base. This paper extends our understanding of the role of communication in retaining institutional shareholders.

Keywords: Disclosure; Institutional investors; Investor relations (search for similar items in EconPapers)
JEL-codes: G14 G34 M13 M41 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11156-023-01129-4

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